Delta Airlines affirms to United States legislators that it will refrain from utilizing Artificial Intelligence to customize airfare prices based on individual customer data.
Delta Air Lines is set to roll out an AI-driven ticket pricing system for up to 20% of its domestic flights by the end of 2025 [1][2][3]. This innovative approach will analyse customer behaviour, booking history, and real-time market data to personalise fares for individual passengers, marking a departure from traditional fixed pricing models.
However, the airline has assured that it does not use personal data to charge different fares to individual customers, addressing privacy concerns that have been raised by legislators [2]. The AI functions like a "super analyst," continuously calculating prices in real time to maximise revenue and reflect demand and customer habits [3][4].
The use of AI for dynamic pricing is not new to the aviation industry, with airlines having employed such strategies for over three decades [1]. Factors such as overall customer demand, fuel prices, and competition influence the fluctuating prices, but a specific consumer's personal information is not involved.
Recent legislative proposals by Democratic lawmakers Greg Casar and Rashida Tlaib seek to ban companies from using AI to set prices or wages based on Americans' personal data [5]. While this legislation does not mention Delta Air Lines specifically, it does prohibit the practice of raising individual prices based on personal data. Notably, the legislation specifically bans airlines from raising individual prices after seeing a search for a family obituary [6].
The Federal Trade Commission (FTC) has also raised concerns about retailers using personal information to set targeted, tailored prices for goods and services [7]. However, the FTC's staff report does not prohibit the use of AI by retailers in general, only the practice of setting targeted, tailored prices based on personal information.
Delta's stance on the matter is clear: the airline has stated that it has not used artificial intelligence to set personalized ticket prices for passengers, and there is no fare product it has ever used, is testing, or plans to use that targets customers with individualized prices based on personal data [8]. This approach ensures that the airline maintains transparency and trust with its customers while leveraging AI technology to streamline the process of analysing data and responding to changing market dynamics.
References:
- Delta Air Lines Press Release, "Delta to Use AI for Dynamic Pricing," [Link not provided]
- Delta Air Lines Statement, "Delta Addresses Privacy Concerns about AI-Powered Pricing," [Link not provided]
- Delta Air Lines President Glen Hauenstein, "Delta's AI Price-Setting Technology," [Link not provided]
- Fetcherr, "Partnership with Delta Air Lines," [Link not provided]
- Congressional Press Release, "Democratic Lawmakers Introduce Legislation to Ban AI Price Discrimination," [Link not provided]
- Congressional Press Release, "Legislation Prohibits Airlines from Using AI to Raise Prices Based on Personal Data," [Link not provided]
- FTC Staff Report, "Retailers' Use of AI for Pricing," [Link not provided]
- Delta Air Lines Letter to Senators, "Delta's Response to Concerns about AI-Powered Pricing," [Link not provided]
- Despite the growing use of AI for dynamic pricing in businesses like technology and finance, as seen in the aviation industry, Delta Air Lines has clarified that it does not use personal data to set individual ticket prices, aiming to maintain customer trust and transparency.
- As legislators, Greg Casar and Rashida Tlaib propose banning companies from using AI to set prices or wages based on personal data, with their legislation specifically prohibiting airlines from raising prices based on individual searches for family obituaries.
- Despite Federal Trade Commission (FTC) concerns about retailers using personal information to set targeted, tailored prices, Delta Air Lines has previously stated that it has not employed, tested, or plans to use any artificial intelligence strategies that target customers with individualized prices based on personal data.
